Mortgage Demand Declines For Third Straight Week

As rates climb, refi demand has plummeted which has pushed total demand down 6.8% for the week, according to the Mortgage Bankers Association’s weekly survey…

  • REFIS: The Refinance Index saw a 15% drop week-over-week and was down a whopping 60% when compared to the same time last year.
  • PURCHASES: The Purchases Index was actually up 1.0% week-over-week and was only down 10% from the same time last year.

NOTE: The refinance share of mortgage activity has now fallen to 40.6% of total applications from 44.8% the previous week.

Rates saw a precipitous jump for the week ending March 25th…

  • 30-YR FIXED: The average contract interest rate jumped a whopping 30 basis points to 4.80%, this is now a staggering 147 basis points higher than one year ago.
  • 15-YR FIXED: The average contract interest rate also saw a big jump with a 25 basis point increase to 4.01%, this is now 129 basis points higher than one year ago.

A 30 basis point jump week-over-week has to be the biggest move in rates I have seen since the pandemic started. We have clearly left the low rate environment that everyone has been enjoying these last two years. Historically, rates are still very low. However, after people have seen 2.5% all of sudden 5.0% doesn’t seem so low anymore. Kind of amazed that refinance demand isn’t down 100% in all honesty. It is also impressive that despite rates being 147 basis points higher than one year ago purchase demand ticked up for the week. Proof that people still want to buy homes even if financing is going to cost a little bit more.